Territorial Tax System Reform and Corporate Financial Policies
|
|
- Deborah Stafford
- 6 years ago
- Views:
Transcription
1 Territorial Tax System Reform and Corporate Financial Policies Matteo P. Arena Department of Finance 312 Straz Hall Marquette University Milwaukee, WI Tel: (414) George W. Kutner Department of Finance 485 Straz Hall Marquette University Milwaukee, WI Tel: (414) This Version: October 2012
2 Territorial Tax System Reform and Corporate Financial Policies Abstract We examine the effect of a permanent change to a country income repatriation tax system on a set of corporate financial policies. In 2009 Japan and UK switched from a worldwide system to a territorial system for the taxation of earnings repatriated by their multinational firms. Due to the relatively high corporate tax rate in Japan and UK, the new system effectively reduced the tax liabilities of most multinational firms when repatriating earnings. We find that after the change Japanese and UK firms accumulate less cash, pay out larger amounts to shareholders through dividends and share repurchases, and invest less abroad. We do not find that the tax system change has significantly affected corporate domestic investments. JEL Classifications: F21; F23; G15; G31; G35 Keywords: International Corporate Finance, Corporate Taxes, Repatriation Taxes, Cash Holdings, Payout Policy; Corporate Investments
3 1. Introduction The taxation of foreign profits repatriated to the headquarters of U.S. multinational corporations has been the subject of a heated debate among policy makers and corporate lobbyists in the last few years. 1 Countries either adopt a worldwide system (also known as taxcredit system) or a territorial system (also known as exemption system). Under the worldwide system, used by the U.S. and a minority of other countries, the domestic country levies corporate taxes on repatriated profits earned abroad. If the foreign corporate tax rate is smaller than the domestic corporate tax rate, a firm pays taxes to the foreign country on subsidiary income and then pays the remaining difference (tax domestic -tax foreign ) to the parent country. If, instead, the foreign tax rate is larger than the domestic tax rate, a firm pays taxes to the foreign country on subsidiary income and then receives a credit on the difference (tax foreign -tax domestic ) by the parent country (Graham (2008 )). As a consequence multinational firms operating in low-corporate-tax countries might choose not to transfer profits back to their domestic country unless necessary. Foley, Hartzell, Titman and Twite (2007) find that U.S. firms facing higher repatriation taxes hold more cash. Most countries adopt instead a territorial system. Under this system, the parent country taxes a firm only on profits earned at home. Foreign subsidiaries repatriated profits are exempt. The repatriation tax system adopted by a country is likely to have significant implications on tax receipts, the level on domestic and foreign corporate investments, and corporate payout policy. 1 See for example Corporate taxes, the myths and facts, The Wall Street Journal, October 12, 2012; Obama vs. Volcker, Et Al. The President's advisers agree with Romney on a territorial tax reform, The Wall Street Journal, October 4, 2012; Why investors can't get more cash out of U.S. companies, The Wall Street Journal, February 19, 2011; and Escaping the shakedown, The Economist, July 4,
4 In this study we investigate the recent repatriation tax system change in U.K. and Japan. These two countries switched from the worldwide to the territorial system at the beginning of This exogenous change provides a unique opportunity to test the different implications of the two systems on corporate financial policies of multinational corporations. Specifically, we investigate if the change in the repatriation tax system significantly affects the level of corporate cash holdings, the amount of dividends paid and shares repurchased by the parent company, and the amount of domestic versus foreign capital expenditures. We find that Japanese and U.K. multinationals accumulate less cash overall, invest less abroad, and distribute more cash to shareholders through dividends and share repurchases after the adoption of the territorial system in However, our results show that the change in the repatriation tax system had no significant effect on the level of domestic corporate investments. Our results have also strong economic significance. A change in the Income Repatriation Tax Cost from its mean value of 0.30 to zero during the territorial system period causes a drop in multinational firms cash holdings of about 15%, an increase in dividend yield from 1.67% to 1.93%, an increase in net payout yield from 1.84% to 2.14%, and a 50% decrease in foreign capex/assets from 6.6% to 3.3%, everything else constant. This study examines for the first time the corporate financial policy implications of a permanent change in a country income repatriation tax system. Previous studies have been confined to the analysis of U.S. samples focusing on a single tax system and a single financial policy decision, such as cash holdings (e.g., Foley, Hartzell, Titman and Twite (2007)) or a temporary change in income repatriation taxation, such as the 2004 Homeland Investment Act (Dharmapala, Foley and Forbes (2011 )). 2
5 The findings of this study are particularly relevant to inform the policy debate in the U.S. about a possible modification of the tax credit system or a possible switch to a territorial system in the same guise of Japan and the UK. While an analysis of the effect of this change on government tax receipts is outside of the scope of this paper, our study shows the strong impact that this policy change is likely to have on corporate financial policies of U.S. multinational firms. The rest of this paper is organized as follows. Section 2 presents the empirical questions related to the possible implications of an income repatriation tax system change to corporate financial policies. Section 3 outlines our sample selection and provides summary statistics and univariate analysis. Section 4 discusses our multivariate analysis. Section 5 reports robustness checks. Section 6 concludes. 2. Hypotheses development Multinational firms have to consider several possible alternatives on how to best use the profits generated by foreign subsidiaries. Firms can maintain foreign earnings abroad with the effect of increasing the subsidiaries cash holdings, they can use foreign earnings to increase investments in the subsidiary countries, or they can repatriate foreign income to the domestic country in the form of intra-firm dividends. The repatriated earnings can be used to increase domestic cash holdings, increase corporate payouts to shareholders, embark in new domestic capital investments, or initiate acquisitions. Altshuler and Grubert (2002) argue that firms residing in worldwide tax system countries with high corporate tax rates (such as the U.S.) and with foreign subsidiaries in countries with lower tax rates tend to avoid the high taxes on repatriation by keeping foreign earnings within the foreign subsidiaries. Grubert and Mutti 3
6 (2001) find that firms with manufacturing subsidiaries with effective tax rates below 10% repatriate on average only 7% of their earnings. Desai, Foley and Hines (2001) study a panel of foreign affiliates of U.S. firms from 1992 to 1997 and find that a decline of repatriation tax rates of 1% is associated with an increase of 1% in intra-form dividends. Repatriation taxes can in part explain why US firms hold more cash than what predicted by standard firm characteristics (Foley, Hartzell, Titman and Twite (2007 )). Desai, Foley and Hines (2007) find that US companies with attractive domestic investment opportunities are more likely to repatriate earnings when the trade-off between external financing costs and repatriation taxes favor earning repatriation. However, Dharmapala, Foley and Forbes (2011) show that during the 2004 tax holiday, U.S. multinational firms used the temporary repatriation tax break to increase payouts to shareholders rather than investing in new domestic projects. We formulate our hypothesis as follows: Hypothesis 1: Japanese and U.K. firms that face repatriation tax costs during the worldwide system period hold less cash overall after the adoption of the territorial system for income repatriation. Hypothesis 2: Japanese and U.K. firms that face repatriation tax costs during the worldwide system period distribute more cash to shareholders in form of dividends and share repurchases after the adoption of the territorial system for income repatriation. Hypothesis 3: Japanese and U.K. firms that face repatriation tax costs during the worldwide system period invest less in new foreign projects after the adoption of the territorial system for income repatriation. 4
7 Hypothesis 4: Japanese and U.K. that face repatriation tax costs during the worldwide system period invest more in new domestic projects after the adoption of the territorial system for income repatriation. Our hypothesis are based on the fact that the great majority of firms headquartered in Japan and the U.K. face repatriation tax costs during the worldwide system period due to the higher corporate tax rate in this two countries compared to the tax rates in most foreign countries where foreign subsidiaries are located. In fact, only about 2% of our sample has a negative repatriation tax cost between 2006 and Sample and Univariate Analysis 3.1.Sample formation and variables The initial sample consists of the entire population of Japanese and U.K. multinational firms covered by WorldScope from 2006 to Consistent with previous studies, we remove financial firms and utilities. After removing companies for which tax data or other variables used in the multivariate analyses are not available, our sample consists of 8,350 firm-year observations (5,303 Japanese and 3,047 UK) and 1,976 unique firms. Consistent with Foley et al. (2007), our sample includes both multinational and purely domestic firms. 2 The main independent variable of this study is the income repatriation tax cost. Similar to Foley et al. (2007), for the period between 2006 and 2008, we compute the income repatriation tax cost by first subtracting foreign taxes paid from the product of a firm s foreign 2 For the multivariate analyses with foreign and domestic capital expenditures as dependent variables, we exclude purely domestic firms from our sample. 5
8 pre-tax income and its effective tax rate. 3 We then scale the maximum of this difference or zero by total firm assets. This variable is set to 0 between 2009 and 2011due to the implementation of the territorial system in 2009, which effectively removed the tax cost of repatriating earnings. We also generate an alternative income repatriation tax cost variable. This variable is analogous to the income repatriation tax cost but for substituting the firm s effective tax rate with the country corporate statutory tax rate. The control variables used in the multivariate analysis are firm characteristics that the extant literature shows to significantly affect cash holdings, payout policy, and corporate investments: Log of Total Assets, Consolidated Income/Total Assets, Market-to-Book Value of Equity, Standard Deviation of Operating Income, Leverage, Capital Expenditures/Total Assets, R&D Expenses/Total Assets, and Tobin s Q. As stated above, our main sample includes multinational and domestic firms. Even excluding tax considerations, multinational firms might hold more cash due to a longer delay between the receipt of cash and its use, and more precautionary cash holdings due to greater overall risk face by multinational firms (Foley et al. (2007)). Moreover firms with a larger proportion of income generated abroad will proportionally pay fewer dividends if most of the foreign income is not repatriated to the domestic headquarters. We control for these possible differences with two income variables: Domestic Income/Total Assets, and Foreign Income/Total Assets. The dependent variables of the different regression specifications are cash holdings, corporate investments and payout policy variables: Cash/Net Assets, Domestic Capital Expenditures/Total Assets, Foreign Capital Expenditures/Total Assets, Dividend Payout Yield, and Net Payout Yield. The Appendix describe all variables and their sources. 3 We calculate the effective tax rate by dividing income taxes by pre-tax income. 6
9 3.2.Descriptive statistics and univariate analysis Table 1 presents descriptive statistics for the all variables. We provide aggregate statistics for the overall sample along with statistics for the Japanese and UK sub-samples. The Alternative Income Repatriation Tax Cost is larger than the Income Repatriation Tax Cost dues to statutory tax rates being usually higher than effective tax rates. While the median of foreign income is 0, its average is $ M, which is only slightly lower than the average of domestic income ($ M). These results suggest that more than half of the sample firms are domestic, but multinational firms post a large amount of earnings abroad. This is more pronounced for UK firms than Japanese firms. The mean foreign income of UK firms is higher than their mean domestic income. UK firms have also larger market-to-book ratio, higher q and higher foreign capital expenditures than Japanese firms. Moreover, more than half of UK firms do not pay dividends or buy back shares. 4 In the main multivariate analyses we include a country dummy. We also replicate our multivariate tests by separating UK and Japanese firms as a robustness check. Table 2 presents univariate tests performed on two sub-samples generated by splitting the sample firm-year observations between worldwide period ( ) and the territorial period ( ). The great majority of UK and Japanese firms faced a positive repatriation cost during the worldwide period. Only about 2% of our sample has a negative repatriation tax cost between 2006 and 2008 due to the relative high corporate tax rate in Japan and UK. We present the results of t-tests of the difference of the means, and Wilcoxon-Mann-Whitney non-parametric tests for the dependent variables of the multivariate analysis: Cash/Net Assets, Dividend 4 The proportion of UK dividend payer to non-payer in our sample is 49:51. 7
10 Payout/Total Assets, and Net Payout (dollar amount of dividends plus repurchases less equity issuances)/total Assets, Domestic Capital Expenditures/Total Assets, and Foreign Capital Expenditures/Total Assets. The sample for these univariate tests consists only of multinational firms. With the exclusion of Cash/Net Assets, these univariate tests provide preliminary evidence of changes in corporate financial policies resulting from the tax system change. The t- test of the mean shows that multinational firms are more likely to pay higher dividends and pay out more overall (i.e., dividends and repurchases) in the period when effectively the tax cost of repatriating earnings drops to zero. The Wilcoxon test suggests that domestic capital expenditures have also increase after the implementation of the territorial system in Finally both the t-test of the mean and the Wilcoxon test show that foreign capital expenditures to total assets are significantly smaller after the elimination of the income repatriation tax. Overall, the results presented in table 2 suggests that, after the adoption of the territorial tax system of income repatriation, multinational firms are more likely to transfer income to their domestic headquarters to pay more dividends, buy back shares and invest domestically rather than abroad. 4. Main multivariate analysis Our multivariate analysis consists of several regression specifications that examine the effect of the change from the repatriation worldwide system to the territorial system on the decisions by Japanese and U.K. firms (a) on the level of cash holdings, (b) on payout policy (both dividend payments and share repurchases), and (c) on the amount of corporate investments abroad and in their domestic country. All regressions specifications are fixed effects regressions: 8
11 y = βx + α + γ + ε (1) it it c j it where y it is one of the corporate financial policy dependent variables listed below, Xit is a vector of the time-varying tax and firm level characteristics listed in the variable section, α c is a country dummy, γ i are industry fixed effects, and ε it is the error term. We do not include year dummies in our main tests because our repatriation tax variables assume the value of 0 for the period and, therefore, include a time component. When estimating equation (1) we account for serial correlation by estimating clustered (Rogers) standard errors, which are White standard errors that account for within firm correlation Repatriation Tax Costs and Cash Table 3 presents the results of fixed effects linear regressions with the natural logarithm of cash to net assets as dependent variable. In the first specification we use Income Repatriation Tax Cost as the tax variable of interest, while in the second specification we use the Income Repatriation Tax Cost variable. The two specifications present a consistent picture. Both repatriation tax cost variables are positive and significant. Until 2008, when due to the credit repatriation tax system firms had to face additional taxes to repatriate income from low tax rate countries, UK and Japanese firms significantly accumulated more cash. 5 This result is consistent with our first hypothesis and confirms the result obtained by Foley et al. (2007) for U.S. corporations. This result has a very strong economic significance. If the Income Repatriation Tax Cost goes from its mean value of to effectively zero during the As stated previously, firms can enjoy a negative repatriation tax cost (overall tax credit) during the tax credit system if the majority of the income repatriated is from countries with tax rates lower than the domestic tax rate. However only about 2% of our sample has a negative repatriation tax cost between 2006 and 2008 due to the relative high corporate tax rate in Japan and UK. 9
12 2011, cash holdings drop about 15% from their median value for multinational firms, everything else constant. Consistent with previous studies about cash holdings determinants (e.g., Opler, Pinkowitz, Stulz and Williamson (1999 )) larger companies, companies with more debt, more capital expenditures, more R&D Expenses and larger payouts (dividends and share repurchases) hold significantly less cash. The positive and significant coefficient of St. Dev. Of Operating Income suggests that the firms in our sample accumulate more cash when faced with more uncertainty. consistent with what Arena and Julio (2012) show for U.S. corporations, 4.2.Repatriation Tax Cost and Corporate Payouts Cash repatriated to the domestic headquarters might be used by corporations to increase corporate payouts. In Table 4 we analyze the effect of income repatriation tax costs on dividends and in Table 5 we analyze the effect of income repatriation tax costs on total payouts (dividends plus share repurchases). The results presented in Table 4 show that both proxies for repatriation tax costs are negatively and significantly related to the dividend payout yield. This result is consistent with our hypothesis that the elimination of repatriation taxes due to the enactment of the territorial system had the significant effect of increasing dividend payments by UK and Japanese corporations. The coefficient of the Income Repatriation Tax Cost implies a large change in dividend yield after the implementation of the territorial system. If the Income Repatriation Tax Cost goes from its mean value of to effectively zero during the , the dividend yield increases from its median value of 1.67% to 1.93%. The control variables have coefficients consistent with the findings of previous studies that analyze the determinants of payout policy (cites). Larger companies, more profitable 10
13 companies, companies with lower leverage, lower R&D expenses and less income volatility distribute more cash to their shareholders in form of dividends. The results of the net payout yield regressions presented in Table 5 are consistent with the results of the dividend regression. Repatriation tax costs have also a negative and significant effect of total net payouts. A change of the Income Repatriation Tax Cost from its mean value of 0.30 to zero during the territorial system period causes a 16% increase in net payout yield from 1.84% to 2.14%, everything else constant. The coefficients of control variables have the expected sign consistent with the dividend regression results of Table 4 and previous studies on payout policy Repatriation Tax Cost and Corporate Investments Another possible consequence of repatriating more profits after the enactment of the territorial system is an improvement in the allocation of funds across countries and a lower likelihood to invest in low or negative net present value projects in foreign countries. We investigate this hypothesis with fixed effects regressions with foreign capital expenditures divided by total assets as dependent variable. For these regressions we exclude purely domestic companies from the sample. Table 6 presents the results. Both repatriation tax cost proxies have positive and significant coefficients consistent with our hypothesis that the effective elimination of a repatriation tax for most firms due to the implementation of the territorial system has significantly reduced foreign investments. The Income Repatriation Tax Cost has also a very strong economic significance. A change of the Income Repatriation Tax Cost from its mean value of to zero during the
14 2011 territorial system period causes a 50% decrease in foreign capex/assets from 6.6% to 3.3%, everything else constant. The payout results presented in the previous tables show that firms use at least part of the cash repatriated to the domestic country to increase distributions to shareholders in form of dividends and share repurchases. Some of the repatriated cash could also possibly be used to increase domestic investments. We test this hypothesis with fixed effects regressions with domestic capital expenditures over assets as dependent variables. As for the regressions of Table 6, we exclude domestic firms from this test. Table 7 presents the results. Neither repatriation tax proxies has a significant coefficient suggesting that after the implementation of the territorial system UK and Japanese firms do not use the additional cash repatriated to their domestic country to increase domestic investments. Overall, the tests discussed in this section show that the switch from a tax credit repatriation system to an territorial system had the effect of encouraging multinational firms to save more foreign cash by cutting foreign investments, to transfer larger quantities of foreign cash to their domestic country to increase corporate payouts but not domestic investments. 5. Robustness tests As most countries around the world, both Japan and UK experienced a deep recession in 2008 and The recessionary years can possibly generate a bias in the results. 6 We replicate our multivariate tests excluding the recessionary years observations. All the tax variable coefficients maintain the same sign and are statistically significant (with the exception of those 6 We feel, however, that this risk is very limited because the recessionary period is split in half between the tax credit system years and the exception system years. 12
15 for the domestic investments regressions). The significance is sometimes at a lower level due to the smaller sample size which reduces the power of our tests. In the main multivariate tests we analyze a sample comprising both Japanese and UK firms. We control for country heterogeneity with a country fixed effect indicator variable. However, some of our independent variables could relate to the dependent variables in a different way for UK versus Japanese firms. To check the robustness of our results to possible country-specific differences, we replicate our multivariate tests after separating UK and Japanese firms into two samples. As for the other robustness test, the coefficients of the tax proxies maintain their sign and are significant at the same or a lower level depending on the regressions. 6. Conclusions Countries rarely make clear-cut changes to their taxation rules. In this study we exploit one of these rare opportunities offered by the decision by Japan and the U.K. in 2009 to switch from a worldwide to a territorial system for the taxation of repatriated corporate income. We find that this change had broad and significant repercussions on corporate financial decisions. The switch from a tax credit repatriation system to a territorial system in Japan and U.K. offered multinational firms residing in these two countries the ability to repatriate foreign income at no additional tax cost. Overall, the results of this study suggests that the removal of this tax disadvantage when repatriating earnings had the effect of encouraging multinational firms to save more cash abroad by cutting foreign investments, and to transfer larger quantities of foreign cash to the domestic country to increase corporate payouts rather than domestic investments. The ability to use more cash from the firms headquarters location for payouts had also the effect 13
16 to decrease overall cash holdings. The results of this paper might inform the decision-making process of policymakers in the U.S. and other countries that are currently adopting a worldwide system and are considering a change in their tax repatriation rule. In more general terms, this study underlines how a permanent change in the corporate tax code can have strong, longstanding consequences for corporate financial policies that can ultimately affect shareholder wealth and the level of employment in domestic and foreign countries. 14
17 References Altshuler, Rosanne, and Harry Grubert, 2002, Repatriation taxes, repatriation strategies and multinational financial policy, Journal of Public Economics 87, Arena, Matteo P., and Brandon Julio, 2012, The effects of securities class action litigation on corporate liquidity and investment policy, Working Paper. Desai, Mihir A., C. Fritz Foley, and James R. Jr. Hines, 2001, Repatriation taxes and dividend distortions, National tax journal 54, Desai, Mihir A., C. Fritz Foley, and James R. Jr. Hines, 2006, The demand for tax havens, Journal of Public Economics 90, Desai, Mihir A., C. Fritz Foley, and James R. Jr. Hines, 2007, Dividend policy inside the multinational firm, Financial Management 36, Dharmapala, Dhammika, C. Fritz Foley, and Kristin J. Forbes, 2011, Watch what i do, not what i say: The unintended consequences of the homeland investment act, Journal of Finance 66, Foley, C. Fritz, Jay C. Hartzell, Sheridan Titman, and Garry Twite, 2007, Why do firms hold so much cash? A tax-based explanation, Journal of Financial Economics 86, Graham, John R., 2008, Taxes and corporate finance, in B. Espen Eckbo, ed.: Handbook of corporate finance (North-Holland). Grubert, Harry, and John Mutti, Taxing international business income: Dividend exemption versus the current system (American Enterprise Institute Press, Washington). Opler, Tim, Lee Pinkowitz, Rene Stulz, and Rohan Williamson, 1999, The determinants and implications of corporate cash holdings., Journal of Finance 52,
18 APPENDIX Variable Definitions and Sources All the financial statement data used to construct the variables is retrieved from Worldscope and is expressed in US dollars. Variable Definition Alternative Income Repatriation Tax Cost Log (Cash/Net Assets) Capital Expenditures/Total Assets Dividend Payout Yield Domestic Income/Total Assets Foreign Income/Total Assets Income Repatriation Tax Cost Leverage Log of Total Assets Net Payout Yield R&D Expenses/Total Assets Market-to-Book Value of Equity St. Dev. of Operating Income Tobin s Q Total Income/Total Assets The product of a firm s foreign pre-tax income and its country corporate tax rate minus foreign taxes paid. The maximum of this difference or zero is then divided by total firm assets. This variable is set to 0 between 2009 and Natural logarithm of cash plus marketable securities divided by total assets minus cash and marketable securities Total cash expenditures divided by total assets Firm s annual dividend payments divided by its year-end market value Domestic earnings before interest and taxes divided by total assets. Foreign earnings before interest and taxes divided by total assets. The product of a firm s foreign pre-tax income and its effective tax rate minus foreign taxes paid. The maximum of this difference or zero is then divided by total firm assets. This variable is set to 0 between 2009 and (Long-term debt + short-term debt)/total assets. Natural logarithm of the firm assets firm s annual total net payout (dividends plus repurchases less equity issuances) divided by its year-end market value Research and Development expenses, set to zero if missing, divided by total assets Ratio of the market value to the book value of a firm s equity Standard deviation of the firm s annual operating income during the sample period Total assets plus market value of equity minus book value of equity, all divided by total assets Consolidated earnings before interest and taxes divided by total assets. 16
19 Table 1 Descriptive Statistics This table presents means and medians of firm characteristics for the full sample, a sub-sample that includes only Japanese firms, and a subsample that includes only UK firms. The sample period is unless otherwise specified in the table. The variables are described in the Appendix. Full Sample Japan United Kingdom Mean Median Mean Median Mean Median Income Repatriation Tax Cost Alternative Income Repatriation Tax Cost Income Repatriation Tax Cost Alternative Income Repatriation Tax Cost Total Assets Total Income Domestic Income Foreign Income Cash St. Dev. Operating Income q Market-to-Book Leverage Capex Domestic Capex (only multinational firms) Foreign Capex (only multinational firms) R&D Expenses Total Payout Yield 2.80% 1.84% 3.00% 2.13% 2.25% 0.00% Dividend Yield 2.47% 1.67% 2.64% 1.89% 1.99% 0.00% 17
20 Table 2 Univariate Test This table presents univariate statistics for cash, payout and capital expenditure variables that are potentially affected by income repatriation taxes. The table contrasts the means and medians of these variables when the repatriation tax cost is positive for most firms (worldwide system period, ) and when instead it is zero (territorial system period, ). For these tests we restrict our sample to multinational firms. The last two columns of the table present the p-values of the t-test of the difference of the means and the p-value of the Wilcoxon-Mann-Whitney nonparametric test diff mean Income Repatriation Tax Cost>0 Income Repatriation Tax Cost=0 t-test Wilcoxon test Mean Median Mean Median p-value p-value Cash/Assets Dividend Yield Payout Yield Domestic Capex/Assets Foreign Capex/Assets
21 Table 3 Cash Holdings and Income Repatriation Tax Cost This table presents the coefficients of fixed effect regressions with the logarithm of cash divided by net assets as dependent variable. The main explanatory variables are the income repatriation tax cost in the first specification and the alternative income repatriation tax in the second specification. All variables are described in the appendix. The regressions include country and industry fixed effects. P-values, obtained with standard errors corrected for clustering of errors by firm, are presented in parentheses. Dependent Variable: Ln(Cash/Net Assets) (1) (2) Income Repatriation Tax Cost (0.003) Alternative Income Repatriation Tax Cost (0.030) Log of Total Assets Domestic Income/Total Assets (0.620) (0.536) Foreign Income/Total Assets (0.662) (0.579) Market-to-Book Value of Equity (0.892) (0.885) Leverage Capital Expenditures/Total Assets R&D Expenses/Total Assets Payout/Total Assets St. Dev. of Operating Income Intercept (0.059) (0.051) Country Dummy Yes Yes Industry Dummy Yes Yes N 8,387 8,387 Adj. R
22 Table 4 Dividend Payout Yield and Income Repatriation Tax Cost This table presents the coefficients of fixed effect Tobit regressions with the dividend payout yield as dependent variable. The dividend payout yield is the firm s annual dividend payments divided by its year-end market value. The main explanatory variables are the income repatriation tax cost in the first specification and the alternative income repatriation tax in the second specification. All variables are described in the appendix. The regressions include country and industry fixed effects. P-values, obtained with standard errors corrected for clustering of errors by firm, are presented in parentheses. Dependent Variable: Dividend Payout Yield (1) (2) Income Repatriation Tax Cost (0.002) Alternative Income Repatriation Tax Cost (0.002) Log of Total Assets Domestic Income/Total Assets (0.000) (0.536) Foreign Income/Total Assets Market-to-Book Value of Equity (0.179) (0.170) Leverage Capital Expenditures/Total Assets (0.921) (0.952) R&D Expenses/Total Assets St. Dev. of Operating Income (0.002) (0.002) Intercept (0.997) (0.998) Country Dummy Yes Yes Industry Dummy Yes Yes N 8,415 8,415 Pseudo R
23 Table 5 Net Payout Yield and Income Repatriation Tax Cost This table presents the coefficients of fixed effect Tobit regressions with the total payout yield as dependent variable. The net payout yield is the firm s annual dividend payments plus share repurchase amount minus equity issuance, all divided by its year-end market value. The main explanatory variables are the income repatriation tax cost in the first specification and the alternative income repatriation tax in the second specification. All variables are described in the appendix. The regressions include country and industry fixed effects. P-values, obtained with standard errors corrected for clustering of errors by firm, are presented in parentheses. Dependent Variable: Net Payout Yield (1) (2) Income Repatriation Tax Cost (0.003) Alternative Income Repatriation Tax Cost (0.001) Log of Total Assets Domestic Income/Total Assets Foreign Income/Total Assets Market-to-Book Value of Equity (0.152) (0.145) Leverage (0.002) (0.003) Capital Expenditures/Total Assets (0.106) (0.075) R&D Expenses/Total Assets St. Dev. of Operating Income (0.017) (0.015) Intercept (0.998) (0.998) Country Dummy Yes Yes Industry Dummy Yes Yes N 8,415 8,415 Pseudo R
24 Table 6 Foreign Investments and Income Repatriation Tax Cost This table presents the coefficients of fixed effect regressions with foreign capital expenditures to total assets as dependent variable. The main explanatory variables are the income repatriation tax cost in the first specification and the alternative income repatriation tax in the second specification. Purely domestic firms are excluded from the sample. All variables are described in the appendix. The regressions include country and industry fixed effects. P-values, obtained with standard errors corrected for clustering of errors by firm, are presented in parentheses. (1) (2) Income Repatriation Tax Cost (0.021) Alternative Income Repatriation Tax Cost (0.084) Log of Total Assets (0.004) (0.001) Domestic Income/Total Assets (0.563) (0.556) Foreign Income/Total Assets (0.729) (0.652) Market-to-Book Value of Equity (0.952) (0.962) Leverage (0.907) (0.926) Lag Capital Expenditures/Total Assets R&D Expenses/Total Assets (0.769) (0.761) St. Dev. of Operating Income (0.096) (0.046) Intercept (0.743) (0.707) Country Dummy Yes Yes Industry Dummy Yes Yes N 1,147 1,147 Adj. R
25 Table 7 Domestic Investments and Income Repatriation Tax Cost This table presents the coefficients of fixed effect regressions with domestic capital expenditures to total assets as dependent variable. The main explanatory variables are the income repatriation tax cost in the first specification and the alternative income repatriation tax in the second specification. Purely domestic firms are excluded from the sample. All variables are described in the appendix. The regressions include country and industry fixed effects. P-values, obtained with standard errors corrected for clustering of errors by firm, are presented in parentheses. (1) (2) Income Repatriation Tax Cost (0.774) Alternative Income Repatriation Tax Cost (0.263) Log of Total Assets (0.089) (0.078) Domestic Income/Total Assets (0.639) (0.570) Foreign Income/Total Assets (0.403) (0.490) Market-to-Book Value of Equity (0.371) (0.392) Leverage (0.0031) (0.0036) Lag Capital Expenditures/Total Assets R&D Expenses/Total Assets (0.141) (0.137) St. Dev. of Operating Income (0.058) (0.030) Intercept (0.512) (0.567) Country Dummy Yes Yes Industry Dummy Yes Yes N 1,147 1,147 Adj. R
Territorial Tax System Reform and Corporate Financial Policies
Marquette University From the SelectedWorks of Matteo P. Arena 2012 Territorial Tax System Reform and Corporate Financial Policies Matteo Arena, Marquette University George Kutner, Marquette University
More informationThe Effect of Taxes on Multinational Debt Location
The Effect of Taxes on Multinational Debt Location Matteo P. Arena* Marquette University Department of Finance 312 Straz Hall Milwaukee, WI 53201-1881 Tel: (414) 288-3369 E-mail: matteo.arena@mu.edu Andrew
More informationDeviations from Optimal Corporate Cash Holdings and the Valuation from a Shareholder s Perspective
Deviations from Optimal Corporate Cash Holdings and the Valuation from a Shareholder s Perspective Zhenxu Tong * University of Exeter Abstract The tradeoff theory of corporate cash holdings predicts that
More informationSources of Financing in Different Forms of Corporate Liquidity and the Performance of M&As
Sources of Financing in Different Forms of Corporate Liquidity and the Performance of M&As Zhenxu Tong * University of Exeter Jian Liu ** University of Exeter This draft: August 2016 Abstract We examine
More informationCorporate Leverage and Taxes around the World
Utah State University DigitalCommons@USU All Graduate Plan B and other Reports Graduate Studies 5-1-2015 Corporate Leverage and Taxes around the World Saralyn Loney Utah State University Follow this and
More informationThe Effect of Financial Constraints, Investment Policy and Product Market Competition on the Value of Cash Holdings
The Effect of Financial Constraints, Investment Policy and Product Market Competition on the Value of Cash Holdings Abstract This paper empirically investigates the value shareholders place on excess cash
More information4 The Regional Economist January corbis
b u s i n e s s t r e n d s 4 The Regional Economist January 213 corbis Why Are Corporations Holding So Much Cash? By Juan M. Sánchez and Emircan Yurdagul U.S. corporations are holding record-high amounts
More informationThe impact of worldwide vs territorial taxation on the location of assets and the scale of investment: A survey of the empirical evidence
The impact of worldwide vs territorial taxation on the location of assets and the scale of investment: A survey of the empirical evidence Martin Simmler University of Oxford Centre for Business Taxation
More informationCash holdings and CEO risk incentive compensation: Effect of CEO risk aversion. Harry Feng a Ramesh P. Rao b
Cash holdings and CEO risk incentive compensation: Effect of CEO risk aversion Harry Feng a Ramesh P. Rao b a Department of Finance, Spears School of Business, Oklahoma State University, Stillwater, OK
More informationDiscussions of the possible adoption of dividend exemption. Enacting Dividend Exemption and Tax Revenue
Forum on Moving Towards a Territorial Tax System Enacting Dividend Exemption and Tax Revenue Abstract - This paper first presents a static no behavioral change estimate of the revenue implications of dividend
More informationThe Role of Credit Ratings in the. Dynamic Tradeoff Model. Viktoriya Staneva*
The Role of Credit Ratings in the Dynamic Tradeoff Model Viktoriya Staneva* This study examines what costs and benefits of debt are most important to the determination of the optimal capital structure.
More informationCAPITAL STRUCTURE AND THE 2003 TAX CUTS Richard H. Fosberg
CAPITAL STRUCTURE AND THE 2003 TAX CUTS Richard H. Fosberg William Paterson University, Deptartment of Economics, USA. KEYWORDS Capital structure, tax rates, cost of capital. ABSTRACT The main purpose
More informationInternet Appendix for Corporate Cash Shortfalls and Financing Decisions. Rongbing Huang and Jay R. Ritter. August 31, 2017
Internet Appendix for Corporate Cash Shortfalls and Financing Decisions Rongbing Huang and Jay R. Ritter August 31, 2017 Our Figure 1 finds that firms that have a larger are more likely to run out of cash
More informationPaper. Working. Unce. the. and Cash. Heungju. Park
Working Paper No. 2016009 Unce ertainty and Cash Holdings the Value of Hyun Joong Im Heungju Park Gege Zhao Copyright 2016 by Hyun Joong Im, Heungju Park andd Gege Zhao. All rights reserved. PHBS working
More informationIs There a (Valuation) Cost for Inadequate Liquidity? Ajay Khorana, Ajay Patel & Ya-wen Yang
Is There a (Valuation) Cost for Inadequate Liquidity? Ajay Khorana, Ajay Patel & Ya-wen Yang Current Debate Surrounding Cash Holdings of US Firms Public interest in cash holdings has increased over the
More informationDo Investors Value Dividend Smoothing Stocks Differently? Internet Appendix
Do Investors Value Dividend Smoothing Stocks Differently? Internet Appendix Yelena Larkin, Mark T. Leary, and Roni Michaely April 2016 Table I.A-I In table I.A-I we perform a simple non-parametric analysis
More informationInterest Rates, Cash and Short-Term Investments
Interest Rates, Cash and Short-Term Investments Bektemir Ysmailov * * Doctoral Student at the College of Business, University of Nebraska-Lincoln, 730 N. 14th Street, Lincoln, NE 68588; phone: 402-472-3450.
More information1. Logit and Linear Probability Models
INTERNET APPENDIX 1. Logit and Linear Probability Models Table 1 Leverage and the Likelihood of a Union Strike (Logit Models) This table presents estimation results of logit models of union strikes during
More informationCORPORATE GOVERNANCE AND CASH HOLDINGS: A COMPARATIVE ANALYSIS OF CHINESE AND INDIAN FIRMS
CORPORATE GOVERNANCE AND CASH HOLDINGS: A COMPARATIVE ANALYSIS OF CHINESE AND INDIAN FIRMS Ohannes G. Paskelian, University of Houston Downtown Stephen Bell, Park University Chu V. Nguyen, University of
More informationUnder the current tax system both the domestic and foreign
Forum on Moving Towards a Territorial Tax System Where Will They Go if We Go Territorial? Dividend Exemption and the Location Decisions of U.S. Multinational Corporations Abstract - We approach the question
More informationFirm Diversification and the Value of Corporate Cash Holdings
Firm Diversification and the Value of Corporate Cash Holdings Zhenxu Tong University of Exeter* Paper Number: 08/03 First Draft: June 2007 This Draft: February 2008 Abstract This paper studies how firm
More informationThe Free Cash Flow Effects of Capital Expenditure Announcements. Catherine Shenoy and Nikos Vafeas* Abstract
The Free Cash Flow Effects of Capital Expenditure Announcements Catherine Shenoy and Nikos Vafeas* Abstract In this paper we study the market reaction to capital expenditure announcements in the backdrop
More informationUNDER THE U.S. WORLDWIDE TAX SYSTEM, U.S.-
THE LOCK-OUT EFFECT OF THE U.S. WORLDWIDE TAX SYSTEM: AN EVALUATION AROUND THE REPATRIATION TAX HOLIDAY OF THE AMERICAN JOBS CREATION ACT OF 2004 Roy Clemons, Florida Atlantic University Michael R. Kinney,
More informationDeterminant Factors of Cash Holdings: Evidence from Portuguese SMEs
International Journal of Business and Management; Vol. 8, No. 1; 2013 ISSN 1833-3850 E-ISSN 1833-8119 Published by Canadian Center of Science and Education Determinant Factors of Cash Holdings: Evidence
More informationCash holdings determinants in the Portuguese economy 1
17 Cash holdings determinants in the Portuguese economy 1 Luísa Farinha Pedro Prego 2 Abstract The analysis of liquidity management decisions by firms has recently been used as a tool to investigate the
More informationThe Effects of Capital Infusions after IPO on Diversification and Cash Holdings
The Effects of Capital Infusions after IPO on Diversification and Cash Holdings Soohyung Kim University of Wisconsin La Crosse Hoontaek Seo Niagara University Daniel L. Tompkins Niagara University This
More informationWhy do U.S. firms hold so much more cash than they used to?
Why do U.S. firms hold so much more cash than they used to? Thomas W. Bates, Kathleen M. Kahle, and René M. Stulz* March 2007 * Respectively, assistant professor and associate professor, Eller College
More informationInvestor Reaction to the Stock Gifts of Controlling Shareholders
Investor Reaction to the Stock Gifts of Controlling Shareholders Su Jeong Lee College of Business Administration, Inha University #100 Inha-ro, Nam-gu, Incheon 212212, Korea Tel: 82-32-860-7738 E-mail:
More informationChapter URL:
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Taxing Multinational Corporations Volume Author/Editor: Martin Feldstein, James R. Hines
More informationThe effect of the tax reform act of 1986 on the location of assets in financial services firms
Journal of Public Economics 87 (2002) 109 127 www.elsevier.com/ locate/ econbase The effect of the tax reform act of 1986 on the location of assets in financial services firms Rosanne Altshuler *, R. Glenn
More informationOn Diversification Discount the Effect of Leverage
On Diversification Discount the Effect of Leverage Jin-Chuan Duan * and Yun Li (First draft: April 12, 2006) (This version: May 16, 2006) Abstract This paper identifies a key cause for the documented diversification
More informationCORPORATE CASH HOLDING AND FIRM VALUE
CORPORATE CASH HOLDING AND FIRM VALUE Cristina Martínez-Sola Dep. Business Administration, Accounting and Sociology University of Jaén Jaén (SPAIN) E-mail: mmsola@ujaen.es Pedro J. García-Teruel Dep. Management
More informationDEBT SHIFTING RESTRICTIONS AND REALLOCATION OF DEBT
DEBT SHIFTING RESTRICTIONS AND REALLOCATION OF DEBT Katarzyna Habu * Yaxuan Qi ** Jing Xing *** This Version: 05.11.2018 Abstract: This paper analyses the effects of tax incentives on the location of debt
More informationCapital Structure and the 2001 Recession
Capital Structure and the 2001 Recession Richard H. Fosberg Dept. of Economics Finance & Global Business Cotaskos College of Business William Paterson University 1600 Valley Road Wayne, NJ 07470 USA Abstract
More informationOptimal Debt-to-Equity Ratios and Stock Returns
Utah State University DigitalCommons@USU All Graduate Plan B and other Reports Graduate Studies 5-2014 Optimal Debt-to-Equity Ratios and Stock Returns Courtney D. Winn Utah State University Follow this
More informationTobin's Q and the Gains from Takeovers
THE JOURNAL OF FINANCE VOL. LXVI, NO. 1 MARCH 1991 Tobin's Q and the Gains from Takeovers HENRI SERVAES* ABSTRACT This paper analyzes the relation between takeover gains and the q ratios of targets and
More informationManagerial Incentives and Corporate Cash Holdings
Managerial Incentives and Corporate Cash Holdings Tracy Xu University of Denver Bo Han University of Washington We examine the impact of managerial incentive on firms cash holdings policy. We find that
More informationWhy Do U.S. Firms Hold So Much More Cash than They Used To?
THE JOURNAL OF FINANCE VOL. LXIV, NO. 5 OCTOBER 2009 Why Do U.S. Firms Hold So Much More Cash than They Used To? THOMAS W. BATES, KATHLEEN M. KAHLE, and RENÉ M. STULZ ABSTRACT The average cash-to-assets
More informationRESEARCH ARTICLE. Change in Capital Gains Tax Rates and IPO Underpricing
RESEARCH ARTICLE Business and Economics Journal, Vol. 2013: BEJ-72 Change in Capital Gains Tax Rates and IPO Underpricing 1 Change in Capital Gains Tax Rates and IPO Underpricing Chien-Chih Peng Department
More informationStock price synchronicity and the role of analyst: Do analysts generate firm-specific vs. market-wide information?
Stock price synchronicity and the role of analyst: Do analysts generate firm-specific vs. market-wide information? Yongsik Kim * Abstract This paper provides empirical evidence that analysts generate firm-specific
More informationContrarian Trades and Disposition Effect: Evidence from Online Trade Data. Abstract
Contrarian Trades and Disposition Effect: Evidence from Online Trade Data Hayato Komai a Ryota Koyano b Daisuke Miyakawa c Abstract Using online stock trading records in Japan for 461 individual investors
More informationThe Effect of Moving to a Territorial Tax System on Profit Repatriations: Evidence from Japan
RIETI Discussion Paper Series 13-E-047 The Effect of Moving to a Territorial Tax System on Profit Repatriations: Evidence from Japan HASEGAWA Makoto University of Michigan KIYOTA Kozo RIETI The Research
More informationOnline Appendix to. The Value of Crowdsourced Earnings Forecasts
Online Appendix to The Value of Crowdsourced Earnings Forecasts This online appendix tabulates and discusses the results of robustness checks and supplementary analyses mentioned in the paper. A1. Estimating
More informationCan Tax Drive Capital Investment?
1 Can Tax Drive Capital Investment? Le Phuong Dung RMIT UNIVERSITY Abstract Classical tax systems and imputation systems are used not only to generate government revenue but also to drive economic growth.
More informationAN ANALYSIS OF THE DEGREE OF DIVERSIFICATION AND FIRM PERFORMANCE Zheng-Feng Guo, Vanderbilt University Lingyan Cao, University of Maryland
The International Journal of Business and Finance Research Volume 6 Number 2 2012 AN ANALYSIS OF THE DEGREE OF DIVERSIFICATION AND FIRM PERFORMANCE Zheng-Feng Guo, Vanderbilt University Lingyan Cao, University
More informationThe Impact of Japan s Stewardship Code on Shareholder Voting
The Impact of Japan s Stewardship Code on Shareholder Voting Yasutomo Tsukioka * School of Business Administration, Kwansei Gakuin University Abstract This study examines the impact of the Japanese version
More informationHow Markets React to Different Types of Mergers
How Markets React to Different Types of Mergers By Pranit Chowhan Bachelor of Business Administration, University of Mumbai, 2014 And Vishal Bane Bachelor of Commerce, University of Mumbai, 2006 PROJECT
More informationInverse ETFs and Market Quality
Utah State University DigitalCommons@USU All Graduate Plan B and other Reports Graduate Studies 5-215 Inverse ETFs and Market Quality Darren J. Woodward Utah State University Follow this and additional
More informationNBER WORKING PAPER SERIES WHY DO U.S. FIRMS HOLD SO MUCH MORE CASH THAN THEY USED TO? Thomas W. Bates Kathleen M. Kahle Rene M.
NBER WORKING PAPER SERIES WHY DO U.S. FIRMS HOLD SO MUCH MORE CASH THAN THEY USED TO? Thomas W. Bates Kathleen M. Kahle Rene M. Stulz Working Paper 12534 http://www.nber.org/papers/w12534 NATIONAL BUREAU
More informationInvestor Demand in Bookbuilding IPOs: The US Evidence
Investor Demand in Bookbuilding IPOs: The US Evidence Yiming Qian University of Iowa Jay Ritter University of Florida An Yan Fordham University August, 2014 Abstract Existing studies of auctioned IPOs
More informationJones, E. and Danbolt, J. (2005) Empirical evidence on the determinants of the stock market reaction to product and market diversification announcements. Applied Financial Economics 15(9):pp. 623-629.
More informationCORPORATE CASH HOLDINGS: STUDY OF CHINESE FIRMS. Siheng Chen Bachelor of Arts and Social Science, Simon Fraser University, 2012.
CORPORATE CASH HOLDINGS: STUDY OF CHINESE FIRMS by Siheng Chen Bachelor of Arts and Social Science, Simon Fraser University, 2012 and Shuai Liu Bachelor of Arts, Dongbei University of Finance and Economics,
More informationCorporate Governance, Product Market Competition, and Payout Policy *
Seoul Journal of Business Volume 20, Number 1 (June 2014) Corporate Governance, Product Market Competition, and Payout Policy * HEE SUB BYUN **1) Korea Deposit Insurance Corporation Seoul, Korea JI HYE
More informationThe current study builds on previous research to estimate the regional gap in
Summary 1 The current study builds on previous research to estimate the regional gap in state funding assistance between municipalities in South NJ compared to similar municipalities in Central and North
More informationSources of Capital Structure: Evidence from Transition Countries
Eesti Pank Bank of Estonia Sources of Capital Structure: Evidence from Transition Countries Karin Jõeveer Working Paper Series 2/2006 Sources of Capital Structure: Evidence from Transition Countries Karin
More informationEURASIAN JOURNAL OF ECONOMICS AND FINANCE
Eurasian Journal of Economics and Finance, 3(4), 2015, 22-38 DOI: 10.15604/ejef.2015.03.04.003 EURASIAN JOURNAL OF ECONOMICS AND FINANCE http://www.eurasianpublications.com DOES CASH CONTRIBUTE TO VALUE?
More informationFinancial liberalization and the relationship-specificity of exports *
Financial and the relationship-specificity of exports * Fabrice Defever Jens Suedekum a) University of Nottingham Center of Economic Performance (LSE) GEP and CESifo Mercator School of Management University
More informationWage Inequality and Establishment Heterogeneity
VIVES DISCUSSION PAPER N 64 JANUARY 2018 Wage Inequality and Establishment Heterogeneity In Kyung Kim Nazarbayev University Jozef Konings VIVES (KU Leuven); Nazarbayev University; and University of Ljubljana
More informationCapital structure and profitability of firms in the corporate sector of Pakistan
Business Review: (2017) 12(1):50-58 Original Paper Capital structure and profitability of firms in the corporate sector of Pakistan Sana Tauseef Heman D. Lohano Abstract We examine the impact of debt ratios
More informationVolume Title: International Taxation and Multinational Activity. Volume URL:
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: International Taxation and Multinational Activity Volume Author/Editor: James R. Hines, Jr.
More informationDistinguished Lecture Series School of Accountancy W. P. Carey School of Business Arizona State University
Distinguished Lecture Series School of Accountancy W. P. Carey School of Business Arizona State University David Guenther of Lundquist College of Business University of Oregon will discuss What Do Firms
More informationDIVIDENDS AND EXPROPRIATION IN HONG KONG
ASIAN ACADEMY of MANAGEMENT JOURNAL of ACCOUNTING and FINANCE AAMJAF, Vol. 4, No. 1, 71 85, 2008 DIVIDENDS AND EXPROPRIATION IN HONG KONG Janice C. Y. How, Peter Verhoeven* and Cici L. Wu School of Economics
More informationThe Determinants of CEO Inside Debt and Its Components *
The Determinants of CEO Inside Debt and Its Components * Wei Cen** Peking University HSBC Business School [Preliminary version] 1 * This paper is a part of my PhD dissertation at Cornell University. I
More informationMERGERS AND ACQUISITIONS: THE ROLE OF GENDER IN EUROPE AND THE UNITED KINGDOM
) MERGERS AND ACQUISITIONS: THE ROLE OF GENDER IN EUROPE AND THE UNITED KINGDOM Ersin Güner 559370 Master Finance Supervisor: dr. P.C. (Peter) de Goeij December 2013 Abstract Evidence from the US shows
More informationTaxpayer Responses to Competitive Tax Policies and Tax Policy Responses to Competitive Taxpayers: Recent Evidence
Taxpayer Responses to Competitive Tax Policies and Tax Policy Responses to Competitive Taxpayers: Recent Evidence by Rosanne Altshuler Department of Economics Rutgers University altshule@rci.rutgers.edu
More informationDoes Working Capital Management Affect Profitability of Belgian Firms? Marc Deloof (*)
Does Working Capital Management Affect Profitability of Belgian Firms? Marc Deloof (*) Faculty of Applied Economics UFSIA-RUCA University of Antwerp Prinsstraat 13 2000 Antwerp BELGIUM E-mail: marc.deloof@ua.ac.be
More informationLocal Culture and Dividends
Local Culture and Dividends Erdem Ucar I empirically investigate whether geographical variations in local culture, as proxied by local religion, affect dividend demand and corporate dividend policy for
More informationIS THERE A RELATION BETWEEN MONEY LAUNDERING AND CORPORATE TAX AVOIDANCE? EMPIRICAL EVIDENCE FROM THE UNITED STATES
IS THERE A RELATION BETWEEN MONEY LAUNDERING AND CORPORATE TAX AVOIDANCE? EMPIRICAL EVIDENCE FROM THE UNITED STATES Grant Richardson School of Accounting and Finance, The Business School The University
More informationDividends and Share Repurchases: Effects on Common Stock Returns
Dividends and Share Repurchases: Effects on Common Stock Returns Nell S. Gullett* Professor of Finance College of Business and Global Affairs The University of Tennessee at Martin Martin, TN 38238 ngullett@utm.edu
More informationSecurity Analysts Journal Prize Dividend Policy that Boosts Shareholder Value
Security Analysts Journal Prize 2006 Dividend Policy that Boosts Shareholder Value Takashi Suwabe, CMA Quantitative Strategist Goldman Sachs Japan Contents 1. Examining Japanese Companies Dividend Policies
More informationInvestment and Capital Constraints: Repatriations Under the American Jobs Creation Act
Investment and Capital Constraints: Repatriations Under the American Jobs Creation Act Online Appendix: Additional Results I) Description of AJCA Repatriation Restrictions. This is a more complete description
More informationInternet Appendix: High Frequency Trading and Extreme Price Movements
Internet Appendix: High Frequency Trading and Extreme Price Movements This appendix includes two parts. First, it reports the results from the sample of EPMs defined as the 99.9 th percentile of raw returns.
More informationAn Empirical Investigation of the Lease-Debt Relation in the Restaurant and Retail Industry
University of Massachusetts Amherst ScholarWorks@UMass Amherst International CHRIE Conference-Refereed Track 2011 ICHRIE Conference Jul 28th, 4:45 PM - 4:45 PM An Empirical Investigation of the Lease-Debt
More informationThe Persistent Effect of Temporary Affirmative Action: Online Appendix
The Persistent Effect of Temporary Affirmative Action: Online Appendix Conrad Miller Contents A Extensions and Robustness Checks 2 A. Heterogeneity by Employer Size.............................. 2 A.2
More informationInvestment Platforms Market Study Interim Report: Annex 7 Fund Discounts and Promotions
MS17/1.2: Annex 7 Market Study Investment Platforms Market Study Interim Report: Annex 7 Fund Discounts and Promotions July 2018 Annex 7: Introduction 1. There are several ways in which investment platforms
More informationThe Decreasing Trend in Cash Effective Tax Rates. Alexander Edwards Rotman School of Management University of Toronto
The Decreasing Trend in Cash Effective Tax Rates Alexander Edwards Rotman School of Management University of Toronto alex.edwards@rotman.utoronto.ca Adrian Kubata University of Münster, Germany adrian.kubata@wiwi.uni-muenster.de
More informationWeekly Options on Stock Pinning
Weekly Options on Stock Pinning Ge Zhang, William Patterson University Haiyang Chen, Marshall University Francis Cai, William Patterson University Abstract In this paper we analyze the stock pinning effect
More informationHedge Funds as International Liquidity Providers: Evidence from Convertible Bond Arbitrage in Canada
Hedge Funds as International Liquidity Providers: Evidence from Convertible Bond Arbitrage in Canada Evan Gatev Simon Fraser University Mingxin Li Simon Fraser University AUGUST 2012 Abstract We examine
More informationHow exogenous is exogenous income? A longitudinal study of lottery winners in the UK
How exogenous is exogenous income? A longitudinal study of lottery winners in the UK Dita Eckardt London School of Economics Nattavudh Powdthavee CEP, London School of Economics and MIASER, University
More informationIntra-Group Business Transactions with Foreign Subsidiaries and Firm Value: Evidence from Foreign Direct Investments of Korean Firms
Intra-Group Business Transactions with Foreign Subsidiaries and Firm Value: Evidence from Foreign Direct Investments of Korean Firms Sung C. Bae a *, Taek Ho Kwon b September 2014 * Corresponding author
More informationExchange Rate Exposure and Firm-Specific Factors: Evidence from Turkey
Journal of Economic and Social Research 7(2), 35-46 Exchange Rate Exposure and Firm-Specific Factors: Evidence from Turkey Mehmet Nihat Solakoglu * Abstract: This study examines the relationship between
More informationAgency Costs of Free Cash Flow and Bidders Long-run Takeover Performance
Universal Journal of Accounting and Finance 1(3): 95-102, 2013 DOI: 10.13189/ujaf.2013.010302 http://www.hrpub.org Agency Costs of Free Cash Flow and Bidders Long-run Takeover Performance Lu Lin 1, Dan
More informationSwitching Monies: The Effect of the Euro on Trade between Belgium and Luxembourg* Volker Nitsch. ETH Zürich and Freie Universität Berlin
June 15, 2008 Switching Monies: The Effect of the Euro on Trade between Belgium and Luxembourg* Volker Nitsch ETH Zürich and Freie Universität Berlin Abstract The trade effect of the euro is typically
More informationAmerica s corporate tax rate is one of the highest in the industrialized
Issues 2012 M M A N H A T T A N I N S T I T U T E F O R P O L I C Y R E S E A R C H I No. 29 October 2012 THE MERITS OF A TERRITORIAL TAX SYSTEM Diana Furchtgott-Roth Senior Fellow Yevgeniy Feyman Research
More informationA Study on the Tax Net Operating Loss Carry-forward and Firm Value Belonging to Large Business Groups
A Study on the Tax Net Operating Loss Carry-forward and Firm Value Belonging to Large Business Groups Yeyoung Moon* Associate Professor, Department of Tax and Accounting, Baewha Women's University, Korea.
More informationOnline Appendix for Offshore Activities and Financial vs Operational Hedging
Online Appendix for Offshore Activities and Financial vs Operational Hedging (not for publication) Gerard Hoberg a and S. Katie Moon b a Marshall School of Business, University of Southern California,
More informationCORPORATE TAX INCENTIVES AND CAPITAL STRUCTURE: EVIDENCE FROM UK TAX RETURN DATA
CORPORATE TAX INCENTIVES AND CAPITAL STRUCTURE: EVIDENCE FROM UK TAX RETURN DATA Jing Xing, Giorgia Maffini, and Michael Devereux Centre for Business Taxation Saïd Business School University of Oxford
More informationSPECIAL REPORT. The Corporate Income Tax and Workers Wages: New Evidence from the 50 States
August 2009 No. 169 The Corporate Income Tax and Workers Wages: New Evidence from the 50 States By Robert Carroll Senior Fellow Tax Foundation Introduction While state-local corporate tax revenue has remained
More informationDIVIDEND POLICY AND THE LIFE CYCLE HYPOTHESIS: EVIDENCE FROM TAIWAN
The International Journal of Business and Finance Research Volume 5 Number 1 2011 DIVIDEND POLICY AND THE LIFE CYCLE HYPOTHESIS: EVIDENCE FROM TAIWAN Ming-Hui Wang, Taiwan University of Science and Technology
More informationWhat Do Cash Holdings Tell Us about Bank-Firm Relationship? The Case of Japanese Firms
HIT-TDB-RIETI International Workshop on the Economics of Interfirm Networks November 29-30, 2012 What Do Cash Holdings Tell Us about Bank-Firm Relationship? The Case of Japanese Firms Osaka University
More informationESSAYS ON MULTINATIONAL FINANCIAL MANAGEMENT JING JIN. Graduate School-Newark. for the degree of. Doctor of Philosophy. Professor Rose Liao
ESSAYS ON MULTINATIONAL FINANCIAL MANAGEMENT by JING JIN A Dissertation submitted to the Graduate School-Newark Rutgers, The State University of New Jersey in partial fulfillment of requirements for the
More informationCapital allocation in Indian business groups
Capital allocation in Indian business groups Remco van der Molen Department of Finance University of Groningen The Netherlands This version: June 2004 Abstract The within-group reallocation of capital
More informationEffects of Derivatives Use on Bank Risk at Japanese Banks: Measuring Banks Risk-Taking after Disclosure Reformation
Draft for EFMA 2014 Effects of Derivatives Use on Bank Risk at Japanese Banks: Measuring Banks Risk-Taking after Disclosure Reformation Nobuhisa Hasegawa Modern Finance Research Center Tokyo Keizai University
More informationTAXATION AND CORPORATE DEBT: ARE BANKS ANY DIFFERENT?
National Tax Journal, March 2017, 70 (1), 53 76 http://doi.org/10.17310/ntj.2017.1.02 TAXATION AND CORPORATE DEBT: ARE BANKS ANY DIFFERENT? Jost H. Heckemeyer and Ruud A. de Mooij Variation in the responsiveness
More informationHow Does Regulation Fair Disclosure Affect Share Repurchases? Evidence from an Emerging Market
International Business Research; Vol. 6, No. 6; 2013 ISSN 1913-9004 E-ISSN 1913-9012 Published by Canadian Center of Science and Education How Does Regulation Fair Disclosure Affect Share Repurchases?
More informationBase erosion and profit shifting in multinational corporations
e Theoretical and Applied Economics Volume XXV (2018), No. 3(616), Autumn, pp. 179-186 Base erosion and profit shifting in multinational corporations Vedang Ratan VATSA MBA-Department of IME, IIT Kanpur,
More informationFinancial Liberalization and Money Demand in Mauritius
Illinois State University ISU ReD: Research and edata Master's Theses - Economics Economics 5-8-2007 Financial Liberalization and Money Demand in Mauritius Rebecca Hodel Follow this and additional works
More informationREIT and Commercial Real Estate Returns: A Postmortem of the Financial Crisis
2015 V43 1: pp. 8 36 DOI: 10.1111/1540-6229.12055 REAL ESTATE ECONOMICS REIT and Commercial Real Estate Returns: A Postmortem of the Financial Crisis Libo Sun,* Sheridan D. Titman** and Garry J. Twite***
More informationUnderwriter Switching in the Japanese Corporate Bond Market
Underwriter Switching in the Japanese Corporate Bond Market 1 McKenzie, C.R. and 2 Sumiko Takaoka 1 Faculty of Economics, Keio University, E-Mail: mckenzie@econ.keio.ac.jp 2 Faculty of Economics, Seikei
More informationR&D and Stock Returns: Is There a Spill-Over Effect?
R&D and Stock Returns: Is There a Spill-Over Effect? Yi Jiang Department of Finance, California State University, Fullerton SGMH 5160, Fullerton, CA 92831 (657)278-4363 yjiang@fullerton.edu Yiming Qian
More information